I grew up in a middle class family. My Mom stayed home to raise my sisters and me and my Dad supported the family. When I got older (I am the youngest) my Mom went back to working. Looking back, we didn’t get everything we wanted, but my parents made sure that we had what we needed – even if we didn’t like the brown winter jacket that was being bought for us!
In any case, I have 3 distinct money memories from my childhood that shaped how I see money today. Below I talk about these three memories and what I learned from them.
Saving Money
I remember going with my Mom to the bank on Friday nights and putting money into a savings account my parents opened up for me. At the time, I was saving $1 or $2 at a time. It doesn’t sound like much now, but to a little kid, that meant a couple packs of baseball cards!
I don’t remember if I fully understood the concept of compound interest back then, I just remember I would get excited to save money so that I would have more money. The idea of earning interest juts blew my mind!
What I Learned: The thrill of saving money. Yeah, I get excited when I put money into a savings account or my investing account to this day. It gives me a warm, fuzzy feeling inside. I think it has carried on because I do understand the power of compound interest and how important it is to invest your money.
I even save my spare change! Whenever I spend money, I put my change into a basket (I then organize it, but that’s another story) and then once or twice a year deposit it at the bank. It amazes me how much that change adds up to.
Buying An NES
As a kid growing up in the late 1980’s an NES was the must have toy. I remember being around 6 and my parents buying my sisters and me an Atari 5200 for Christmas. I loved playing Pole Position and Galaxian, even if my thumb got sore doing so.
Fast forward a few years and my good friend got an NES. I was blown away and wanted one really bad. The only problem was that my parents weren’t buying me one.
I ended up saving the money I received that year for Christmas and my birthday – my birthday is right after Christmas if you didn’t know (hint, you can learn more about me in this cool post) – to buy the NES.
I remember sitting on the end of the sofa proposing this idea to my parents and they agreed to let me buy the NES. The next day, I headed off to Toys R Us to buy the NES.
I can still remember holding $100 in my little hands. I felt like I could buy the world with that much money. After all, it was the most money I had ever held in my hands. I was used to $1 or $2, not $100.
Reality hit me when I was checking out and the cashier told me I owed $105.98! The NES was $99.99 and I had to pay sales tax, which was a foreign concept to me. Luckily my parents gave me the $6 to cover the tax.
I couldn’t believe the store was taking another $6 from me. It felt like so much money, which is ironic because I had $100 in my hands. But again, to a little kid, $6 is a lot of money!
What I Learned: I learned that day that taxes suck. Seriously. I pay what I am supposed to pay in taxes each year, but make sure I take the steps so that I pay the least possible in taxes. I invest in my 401k plan and in IRAs. I fund a health savings account. All of these help to lower my tax bill.
From there, I make sure I invest in index funds to limit capital gains in my taxable accounts. Most of us don’t realize how much we pay in taxes and by taking just a few small steps, we can save a lot more of our hard earned money.
The Value of Work
When I was around 12 or 13, my friend and I wanted to start camping out in our backyards. The only problem was that I didn’t have a tent. I went with my Mom to Kmart one Saturday and was looking at tents. I found an awesome one that I wanted, but it was close to $200. I didn’t have the money to buy it and my birthday wasn’t until December. It was looking like I wasn’t going to have a tent for the summer.
But then my Mom made a deal with me. I put the tent on layaway with a down payment of $10 that I had. I would then work extra chores around the house and would come back each week to pay down the layaway balance.
Doing the extra chores wasn’t fun to say the least. In a few short weeks though, I was sleeping in my tent with my buddy.
What I Learned: I learned that you appreciate things more when you work for them. My Mom could have just bought the tent for me, but she didn’t. I had to work for it. Because of this, I appreciated having it that much more. I remember spending afternoons in it, just lying around.
Being older now, I know that if you want something, you have to work for it. No one is just going to give you things without the work. Sadly, too many people don’t understand this concept though. They play the lottery hoping to strike it rich overnight. The few that do win the lottery end up penniless in a few short years because they never appreciated the money. They never had to work for it.
Final Thoughts
These 3 money memories have stuck with me my entire life. It’s crazy to think that they would have such a lasting impact on me, but they do. Luckily, they are all positive memories and have a positive impact on my life. Others who were raised with poor money habits carry those scars with them into their adult lives.
If this is you, how do you overcome them? Educate yourself. Take things slowly and learn better money habits. If you are in debt, start to work by living within your means so that you can pay off your debt.
There are tons of free resources out there to start a budget, including these free excel spreadsheets. Once the budget is in place, you can start tackling your debt using the snowball method.
If you are not in debt, but aren’t saving for emergencies or your future, you need to start. Look into an automated saving program that will save money for you.
Next, you need to start investing. This post walks you through the steps you need to take to be successful when investing.
The more you learn and educate yourself about personal finance, the greater the chance you have of changing your circumstances and your life. Take it slow and learn at your own pace. You don’t have to become a master by the weekend. At the end of the day, personal finance is not that complicated – just spend less than you make and save the difference. That’s it.
Take the time to understand things better and you will be amazed at how your finances change.
[Photo Credit: Laurence Simon]
The post My First Money Memories appeared first on MoneySmartGuides.com.